Why The Arbitration Award Against Adrian Peterson Was Vacated

A federal judge in Minnesota today vacated the arbitration award that confirmed the NFL’s discipline of Adrian Peterson. You can read the decision here. The judge found two separate bases for vacating the award: 1) the award failed to “draw its essence” from the parties’ Collective Bargaining Agreement; and 2) the arbitrator exceeded his authority by deciding an issue not submitted to him. (Last week it was Lance Armstrong, this week it’s Adrian Peterson. Sports stars are giving us great opportunities to discuss arbitration law lately…)

The court began its analysis by acknowledging the high bar for vacating arbitration awards, but then immediately noted that deference has its limits. “Arbitration awards, however, are not inviolate, and the court need not merely rubber stamp the arbitrator’s interpretations and decisions.”

In this case, the court concluded that the award did not draw its essence from the CBA. The court made that finding primarily because the NFL applied its new Personal Conduct Policy to Peterson, even though Peterson’s conduct took place before that new policy was enacted. The court cited testimony showing that the NFL Commissioner had previously admitted he could not retroactively apply the new policy, as well as cited a previous arbitration award finding that the NFL could not apply its policies retroactively. Those two factors convinced the court that the “law of the shop,” which it considered part of the “essence” of the CBA, precluded the NFL from applying the new policy to Peterson. Therefore, it found the arbitration award–which affirmed the application of the new policy–failed to draw its essence from the parties’ agreement and must be vacated.

The court also found a second basis to vacate the award: the arbitrator’s willingness to analyze whether the discipline was allowed under the old policy. Because the Players Association did not ask the arbitrator to address that issue, the court found the arbitrator lacked authority to do so.

Other sites will talk about the implications of this decision for the Vikings, for Adrian Peterson’s career, for the NFL’s image, or for child protection, so I only offer a few thoughts about the arbitration analysis. This case drives home again that labor arbitration is different. For example, failing to “draw its essence” from the parties’ agreement is not one of the four bases for vacating arbitration awards under the FAA. Indeed, it seems that if a court applied the very hands-off review prescribed by SCOTUS in Sutter to the Adrian Peterson arbitration award, the award would have survived. (You may recall that Justice Kagan said even if an arbitrator committed “grave error” in his analysis, the award must be confirmed as long as the arbitrator was even arguably construing the parties’ agreement.) In this case, the court’s discussion of the arbitration award makes clear that the arbitrator was at least arguably construing the parties’ CBA, and makes equally clear that the court vehemently disagreed with the construction.

After reading the reasons the court stacked up as to why the new policy should not have been applied to Peterson, and the NFL’s previous acknowledgement of the prohibition against retroactive application, I was left wondering whether the vacatur decision was animated by a sense that the arbitrator had been biased. One of the arguments the Players’ Association made in favor of vacatur was, in fact, that the arbitrator was biased in favor of the NFL as a result of his previous employment by the NFL and his continuing receipt of funds from the NFL. But the court found it did not have to address that issue head on after it found two other bases for vacating the award. Was that just a Minnesota Nice solution that avoided pointing fingers? Maybe that issue will be discussed in more depth if this case gets appealed.

Liz Kramer is a shareholder at Leonard, Street and Deinard, one of the largest law firms in Minnesota, where she litigates complex business and construction disputes. Liz graduated from Yale Law School and is deeply knowledgeable on arbitration law. Website: www.arbitrationnation.com